BUSINESS MATTERS

Top 5 Arkansas business stories in 2016 offer optimistic outlook

At their worst, year-end lists are just a quick, easy way to fill space.

When done right, a year-end list can offer thoughtful insight into why a topic mattered, and explain why it will continue to matter moving forward.

Where does this list fall? Feel free to make use of the contact information below and offer your constructive criticism or a list of your own.

Below, in no particular order, are five important Arkansas-related business stories from 2016:

Gone to 'pot'

Want to kill some time at a holiday party this year or at any sort of gathering in 2017? Bring up medical marijuana and what it means for business in Arkansas.

Some early estimates value marijuana sales in the state at $60 million annually.

We're probably a year away from 'pot' having any measurable economic impact in the state, but it's already having measurable impact on conversations. During a recent Christmas party, marijuana coverage in this newspaper came up and 45 minutes passed before a reporter, pharmacist, banker and partner in a solar energy firm realized their drinks needed a refill.

Each of the above industries -- and then some -- will be affected by voters' decision to make medical marijuana available. How and where 'pot' will matter most in the state becomes more clear in 2017 as regulations are created by the state's legislators and marijuana commission.

Topping $10 billion

Simmons First National Corp. shareholders were told at their annual meeting in April that the Pine Bluff bank would one day be above $10 billion in assets with operations in additional states.

"One day" came in December when Simmons announced the purchase of Southwest Bancorp, an Oklahoma-based bank with branches in Colorado, Oklahoma and Texas. The deal will be complete in the third quarter of 2017.

Simmons' purchase of the bank and its $2.5 billion in assets is the latest example of strong Arkansas financial institutions taking advantage of industrywide consolidation.

Bank of the Ozarks had two bank purchases in 2016 totaling $1.2 billion, pushing its assets to $18.4 billion. Centennial Bank's purchase of two Florida-based banks will push its assets from $9.75 billion to just over $10 billion.

Change at the top

Donnie Smith's final day as CEO of Tyson Foods comes at the end of 2016.

While Smith's departure is relatively run-of-the-mill, any leadership change at one of the state's "Big 3" is noteworthy.

Tom Hayes, currently president of Tyson, will replace Smith. He's already hinted that the Springdale-based meat company will be in acquisition mode.

Tyson is also going to be putting "a lot of focus on innovation," Hayes told investors. It will continue to push for growth in China and India.

Hayes joined Tyson two years ago as part of that company's $7.7 billion acquisition of Hillshire Farms. Guiding Tyson through a lawsuit alleging it engaged in price fixing with competitors is also on Hayes' agenda.

Smith took over as CEO in 2009. He spent 36 years at Tyson.

Timberrrr ...

(And also textiles)

One of the more memorable quotes delivered this year came from Pike County Judge Dewight Mack.

Mack was running through the list of reasons Caddo River Forest Products beginning operation in an abandoned sawmill was a big deal for his constituents when he said: "We may even get a red light in Pike County."

Whether the plant leads to that sort of growth remains to be seen, but the $50 million investment is expected to create about 136 jobs in Glenwood. Another 200 to 300 "indirect jobs" are expected for loggers, landowners and transportation workers once the mill is running again.

The former Curt Bean Lumber Mill has been dormant since 2010.

Even bigger news for the timber industry came in April when Sun Paper Industry Joint Stock Co. announced it was building a $1 billion pulp mill near Arkadelphia in Clark County. That project is expected to create about 250 jobs at the plant, plus another 2,000 construction jobs over three years.

Another Chinese company, Suzhou Tianyuan Garments Co., announced in October that it would invest $20 million to build a clothing plant in Arkansas. About 400 full-time employees will earn an average wage of $14 per hour once operational. The location has not been announced.

If you can't beat 'em ...

After years of trying to strategize ways of attracting younger, higher-income city dwellers to Wal-Mart and Wal-Mart.com, the world's largest retailer found a $3.3 billion solution.

By acquiring startup Jet.com, Wal-Mart was able to purchase valuable online shopping technology and a relatively untapped customer base. Visiting Jet.com might feel like an alternative to shopping at Wal-Mart, but customers are still contributing to the Bentonville-based retailer's bottom line.

"As big and wonderful as Wal-Mart is, when you put Walmart.com on it, there's a certain and fairly sizable demographic that might not go there because they don't necessarily identify themselves as Wal-Mart customers," Neil Stern, a senior partner with Chicago-based McMillan Doolittle, told our Robbie Neiswanger earlier this year. "So I think by having the Jet platform, it gives you access to a more upscale customer, a broader customer base."

Wal-Mart also is using the purchase of Jet.com technology to improve its own online operations as it continues the multichannel shopping battle with Amazon.com and more traditional brick-and-mortar retailers.

If you have a tip, call Chris Bahn at (501) 378-3518 or email him at cbahn@arkansasonline.com

SundayMonday Business on 12/25/2016

Upcoming Events